Uncovering the Truth Behind Zillow Zestimate Accuracy

By: ROS Team

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When it comes to buying or selling a home, it’s essential to have an accurate estimate of its value. One of the most widely used tools for this purpose is Zillow Zestimate Accuracy, which uses a proprietary algorithm to calculate an estimate of a home’s value based on factors such as location, size, and features of the home.

However, the accuracy of Zillow Zestimate has been called into question, and many have raised concerns about its reliability. In this article, we’ll take a closer look at Zillow Zestimate and its methods to help you understand whether or not you can trust this tool.

How Zillow Zestimate is Calculated?

Zillow’s Zestimate is calculated using a proprietary algorithm that takes into account various factors such as the location, size, and features of a home.

The algorithm also uses data from public records, user-submitted information, and other sources to make its estimate.

According to Zillow, the algorithm is designed to be a starting point for determining a home’s value, and it is not intended to replace a professional appraisal.

The algorithm uses machine learning models that are trained on millions of data points from various sources. These models take into account various physical characteristics of a property. Such as square footage, number of bedrooms, and bathrooms, lot size, age of the property, and location.

How Zillow Zestimate is Calculated
Photo Credit: Canva

 

It also uses data from public records, such as recent sales and property tax data, to determine a home’s value.

However, Zillow also allows homeowners to update the information about their property and provide additional details. Such as recent renovations, unique features, and other characteristics that can impact the value of a home. This user-submitted information is also taken into account when generating the Zestimate.

It’s important to note that the Zestimate is based on historical data and does not account for future market fluctuations or other factors.

Additionally, it’s not able to take into account the condition of a home. Which can significantly impact the value of a property.

In short, Zillow Zestimate is calculated using a proprietary algorithm that takes into account various factors. Such as location, size, and features of a home and uses data from public records and user-submitted information.

However, it’s not intended to replace a professional appraisal, and the accuracy of the estimate can vary depending on the location, the condition of the home, and other factors.

Criticisms of Zillow Zestimate

One of the main criticisms of Zillow’s Zestimate is its accuracy. In 2017, Zillow itself admitted that the median error rate of Zestimate was 5.5%. This means that for half of the homes, the Zestimate was within 5.5% of the final sale price, and for the other half, it was off by more or less than that.

However, it’s worth noting that the error rate varies depending on the location. The error rate is lower in some areas, while in others, it is higher.

Another major criticism is that Zillow’s Zestimate doesn’t consider a home’s condition.

Criticisms of Zillow Zestimate
Photo Credit: Canva

 

For example, if a home is in poor condition, it will likely sell for less than a similar home in good condition. However, Zillow’s Zestimate doesn’t take this into account, which can lead to inaccurate estimates.

Additionally, Zestimate is not able to take into account the unique features of a home. Such as a waterfront property or a home in a historic district. Which can impact the value of a home significantly.

Another factor that can impact the accuracy of Zillow’s Zestimate is the data that is used. Zillow relies on public records and user-submitted information to make its estimates. However, this data is not always accurate or up-to-date.

For example, if a home has been renovated or updated. The information in public records may not reflect these changes, which can lead to an inaccurate Zestimate.

Furthermore, Zillow’s Zestimate is not intended to replace professional appraisals. It’s not a substitute for a full home evaluation by a professional. Some real estate agents or sellers may use the Zestimate to underprice or overprice the property, which could result in a loss for buyers and sellers.

In summary, Zillow’s Zestimate has been criticized for its accuracy. Which varies depending on the location and the condition of the home. Additionally, it doesn’t take into account the unique features of a home or relies on accurate and up-to-date data, which can lead to inaccurate estimates. Furthermore, it’s not intended to replace professional appraisals and is not a substitute for a full home evaluation by a professional.

Which is more Accurate: Zillow’s Zestimate or Redfin’s Estimate?

Both Zillow’s Zestimate and Redfin’s Estimate are online tools that provide an estimate of a home’s value. However, the accuracy of these estimates can vary depending on a number of factors. Such as the location and the condition of the home.

According to Redfin, its estimate is more accurate than Zillow’s Zestimate. Redfin claims that its estimate is based on more accurate and up-to-date data. Including information from multiple listing services (MLS), and it takes into account the condition of the home, which Zillow’s Zestimate does not.

Redfin also uses a machine learning model that is updated daily with new data, which helps improve the estimate’s accuracy.

On the other hand, Zillow uses a proprietary algorithm that takes into account various factors. Such as the location, size, and features of a home and uses data from public records and user-submitted information.

It’s worth noting that both Zillow and Redfin estimates are not appraisals. They are just estimates and should be used as a guide only.

Final Thoughts

Zillow’s Zestimate is a widely used tool for getting an estimate of the value of a home. But the accuracy of this estimate has been questioned. It’s not intended to replace a professional appraisal, and the accuracy of the estimate can vary depending on the location, the condition of the home, and other factors.

Additionally, Zillow’s Zestimate has been criticized for not taking into account the unique features of a home or relying on accurate and up-to-date data, which can lead to inaccurate estimates.

To ensure that you’re getting an accurate estimate of the value of a home. It’s best to consult with a local real estate agent or appraiser who has the most knowledge of the local market and will be able to take into account factors that online tools may not be able to.